Asos Share Discussion Threads

[themirror] 20/10/2017 10:40

Think people want stock but its priced as is, so i expect some shaking to £45/50 so people can trade.

[madbadtrader] 18/10/2017 20:27

Anyone holding should look at the chart and seriously consider selling.

PE Ratio 71; increasing sales but low profit margins; no FCF till 2019; lots of competition also with good sales growth....

[walbrock82] 17/10/2017 14:34

ASOS continued sales growth see the retailer’s profit jumped by 145%. However, the role was reversed when positive free cash flow of £52m in 2016 turned into a negative £14m. This marks the end of their continuous cash build-up.

The company did say positive FCF will return in 2019 as it winds down their capital expenditure programme as they increase capacity large enough to accommodate group sales of £4bn. But, given their robust sales growth rate, they will probably return to high capex spending sooner rather than later.

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[dcarn] 15/10/2017 09:44

Local paper but reads well.

[hosede] 04/5/2017 13:49

Amazing - this sailing serenly on after NXT results today.

[telbap] 02/5/2017 16:31

Weeeeeee all the way back to £60...

[hosede] 10/4/2017 11:19

Well done Prettygreen. I thought you were inferring that it was going to go higher in the near future

[prettygreen] 07/4/2017 20:38

I couldn't agree more - however I bought at @ £32 and sold at @ £51, then bought back in at @ £46. Sold out when it hit £60 and will (hopefully) dive back in when the selling abates.

[hosede] 07/4/2017 13:09

Prettygreen
For a share worth £50 you would expect a dividend of £1.50 to £3.00 to make reasonable return. Will you live long enough for that to happen? I certainly won't. A reasonable price for this share would be in the £6 to £10 range - and even that is assuming some growth (which might not happen). Remember 85% of all investment returns are dividends

[madbadtrader] 06/4/2017 21:37

Funny how those holding the stock always slam the negative comments and don't hold an open mind. If you done well from the shares congratulate yourself and bank the profits, I think the upward momentum has been broken - could be a long way down. This from Credit Suisse (thanks to Google translate):


The stock fell more than 3% on the London Stock Exchange. At Credit Suisse, we no longer believe in the potential of Asos online fashion distributor. From 'neutral', the board of analysts on this British value went on sale ('underperformance'). Even if the associated course objective goes back from 5,100 to 5,300 pence.

According to experts, there are reasons to be cautious about Asos, starting with higher distribution and storage costs in the first half of the year (Asos's fiscal year ends in August). According to Credit Suisse, this demonstrates the difficulty of Asos in taking advantage of the leverage usually associated with higher volumes.

In addition, Credit Suisse is concerned that many of the catalysts that have sustained growth in the last 12 months are in the process of normalizing. Finally, the premium that Asos shares on comparable values ​​has never been higher. Faced with Zalando, it is about 40%.

[dangersimpson2] 06/4/2017 17:00

Trend following can be a good strategy but it's a lot lower risk when you trade in line with fundamental value. So buying something that is undervalued and then riding the trend works well. Buying something overvalued in the hope that it becomes more overvalued based on trend leads to pretty viscous draw downs as we've seen recently with ASOS on the poor results. It's known as a momentum crash in the research.

[prettygreen] 06/4/2017 16:15

Funny how all these harbingers of doom appear when there's some profit taking isn't it. Presuming you guys didn't buy in and ride the uptrend then 😂

[hosede] 06/4/2017 11:53

I'm afraid the only possible reason to buy this share would be the "greater fool" theory. Are there that many "greater fools" around now?

[dangersimpson2] 06/4/2017 10:41

Net Current Assets are positive but at £9.5m only just.

Given that they are guiding another £90-110m capex in H2 and about £40m PAT I would expect this to go negative with the FY results.

Most of their capex is acquiring intangible assets so the balance sheet is relatively weak.

At 46xTBV no one is buying this based on balance sheet protection tho!

[henchard] 05/4/2017 20:07

Ah, okay, I think they're based on last FY accounts (year ended 31 Aug 2016).

[madbadtrader] 05/4/2017 18:03

Sorry - just got it off ADVFN Financials (menu at the top of the screen).

[henchard] 05/4/2017 15:37

madbadtrader,

I don't disagree with your general point, but I don't see where you get debts of £450m from. The company has no borrowings, £154m cash and positive net current assets.

Your P/E of 195 seems way too high too. Taking your £4.8bn market cap and £78m pre-tax profit forecast and applying an effective tax rate of 20% gives a net profit of £62.4m and a P/E of 77.

[madbadtrader] 05/4/2017 15:05

Debts: £450 million
PE Ratio: 195
Market Capital: £4.8 billion
Consensus estimates for pre-tax profit this year to drop by 2-3% to £78-79 million
Co-founder sells 15.5 million shares back in January

....Who on earth would want to buy this share? And if you own it, why wouldn't you sell it now and bank those profits, before the numpty's in the City fess up that their ludicrous valuations are based on hype?

Once the pound starts to go up (and it will), and inflation rises - this share is going to plummet in the same way as the grossly overvalued dot com's (with their ludicrous PE ratios) did in 2000!!

Even with a PE ratio of 100 (hopelessly OTT) that gives around £30 a share; at £57 a share - why would you continue to hold???

[malcontent] 04/4/2017 17:03

don't you just LOVE a bull market......

[jak1] 04/4/2017 16:31

Gave up a long time ago trying to fathom the value of this company. Madness, but madness rules...

[dangersimpson2] 04/4/2017 10:41

Just because they call it 'price investment' doesn't actually make it an investment. Dropping prices to generate higher sales is not an investment in my opinion because as soon as the prices go up the sales go away again. To be fair they are not the only retailer to call discounting "price investment." It seems to be an industry wide attempt to hide poor figures in an overly competitive environment.

True investment goes through the cashflow statement not the income statement. They did invest £62m in capex in the HY hence the negative FCF.

[notacrowd] 04/4/2017 09:04

"Sales up £250m. Profit up £2.5m. That's what you call discounting to drive revenue." Incorrect, the relatively low profit is due the costs of growth and expansion. It is a good thing, not a bad thing.

[harebridge] 04/4/2017 08:11

18% growth for U.K. Is pretty poor. Exited China & concentrating on international growth.Looks like they could could be heading to the last frontier of e commerce on earth- India.

[lebiche] 04/4/2017 07:24

Sales up £250m. Profit up £2.5m. That's what you call discounting to drive revenue.